Tips for Buying a New Vehicle

I don’t normally buy new vehicles, preferring instead to buy a vehicle slightly older so someone else pays for the depreciation.

However, in 2006 we purchased a brand new car.

And it was the first time I ever felt as though we did ok on the purchase. In the past we walked out of the dealership feeling stung by the experience.

What was different this time around?

I followed these steps:

1) Do your research and decide exactly what vehicle make and model you want to buy
2) Go on the internet and find websites for the dealerships in your area
3) Contact these dealerships via email and tell them you are interested in buying that specific vehicle make and model
4) Give each dealership the timeframe you expect to make a purchase
5) Let each dealership compete for your business through email with you (on an individual basis)
6) Do not let the dealerships know the others who are also competing for your business, but do let them know you are shopping
7) A week before you are set to buy let them know the exact day you are making a decision and tell them you need their best offer

This plan worked to perfection for us.

Filing an Auto Insurance Claim

No one likes filing an insurance claim – it means our lives have been disrupted with something that will probably cost us time, money, aggravation or all of the above.

When you file a claim, have a pen and paper ready.

Write down who you talk to and the date. Keep a note pad specifically for the intent of recording every conversation or promise made along the way.

I firmly believe most claims reps work hard. I firmly believe that most claims reps try to serve the client to the best of their ability.

But sometimes you run into situations or people where the best intent goes awry. And that is where you need to document.

Claims situations can be stressful enough without having a claims rep who gives poor service or does not return calls. I have seen or heard this complaint before. But for all the claims that happen these complaints are few and far between.

If you have trouble with a claims rep contact your agent and let them get involved.

Credit Scoring – What you should know

The Michigan Supreme Court has ruled that insurance companies in their state may use credit scoring.

It’s a practice used in a lot of states, including Arizona, to partially determine auto and home insurance rates.

Some insurance companies utilize credit scoring to a greater degree than others. One carrier may look at credit first and place a consumer in a specific tier based on their insurance credit score. Then other factors are added into the mix. Other carriers may give credit scoring the same or less affect as other factors, such as driving record, zip code, age, type of car.

Credit scoring is great for those with great credit.

It may not be so great if you have bad credit or average credit.

If you are against credit scoring being used for insurance purposes, consider this. The Michigan Supreme Court ruled (in part) that insurance carriers adequately demonstrated that credit scoring is a good indicator of a person’s insurance risk. The MI court even went so far to say that credit scoring actually lowers insurance costs.

Don’t forget that having good credit will not only help you pay less for your insurance. You will also pay less for almost any other type of loan – car loans or home loans, and maybe even credit cards. Better credit allows you to secure lower interest rates (and lower payments subsequently) for a myriad of situations.

To our knowledge only 4 states prohibit credit scoring in full or partially. Those include California, Hawaii, Massachusetts and Maryland.

Who to believe?

Attorneys advertise all the time on TV and radio…..or at least so it seems.

Many of these advertisement are directed at the insurance industry. But there is one specific ad that is on radio that I find truly unfortunate. The ad says something like the following:

“If you have an accident do not settle with the insurance company until you have talked with an attorney. It is the insurance company’s job to pay you the least amount possible……..(and on and on it goes).”

The inference is that an insurance company is out to cheat or lowball everyone who has a claim.

I have been in the insurance industry since 1993 and have helped tons of clients with their insurance – and I feel quite different about this issue than these lawyers supposedly do. My experience and the experience of my clients is in opposition of this attorney advertisement.

First of all, almost no one is happy in a claim situation. Your car is damage, you are injured, have been robbed, or your home was hit with a fire, storm or involved in some other type of claim. Almost NO ONE is happy to be involved in a claim. It is a negative situation from the start and sometimes filled with people who are angry and emotional.

While it would be easy to say my loyalty is with the insurance industry and (of course) I would defend them. I would tell you that there have been publicized events where insurance carriers allegedly did not do the right thing necessarily. There are examples where insurance companies have been accused of not treating an insured properly or not handling a claim correctly. They are not perfect, for sure, and I agree with that assessment.

However, there are literally tens of thousands of claims going on at any time with hundreds of insurance carriers, maybe hundreds of thousands of various claims per year. As a guess, I would say 95% of these are handled smoothly and without fanfare.

I officed for about two years within a claims office (rent was right) one time during my career and became very familiar with many of the claims reps. After two years I came away believing that these folks work very hard, try to do the right thing by the company and policyholder and simply did their best to follow the guidelines of the insurance contract.

Isn’t that what all of us would expect in a claim situation? Well…..everyone but the legal field it seems.

Credit reports typically include information on three types of public records – bankruptcies, tax liens and judgements.

Core Score

All that is about to change with the advent of Core Score.

Core Score is information obtained from sources such as rental applications and evictions, auto title loans and payday loans, and transactions with rent to own businesses.

This information may help those consumers who off the radar a bit and traditionally stay away from typical loans. And certainly, it could further negatively impact others.

Just another reason to stay within your budget, do not purchase what you cannot afford and buy on credit only if you can pay it off.

Who Has the Biggest Car Market in the World?

Here Come the Chinese

In 2009, stimulus programs in China helped it to become the world’s largest car market. SAIC Motor Corp said car sales continue to rev up to tune of 44% higher sales in the first half of 2010 with 1.77 million vehicles sold.

However, there are reports that China is beginning to scale back their automotive incentives, which will likely result in few car sales.

Chevrolet, meanwhile, is reversing an old strategy. Typically they would provide smaller vehicles with minimal extra features. Beginning with the Chevy Cruze, GM is including as standard items features such as 10 airbags and stability control. All these standard “extras” will come at a price. The Cruze is already being sold in places like Europe and Asia.

GM hopes to de-emphasize SUV’s and trucks and gain more profitability from vehicles like the Cruze. They have plans to overhaul other models to increase sales. Those include the Aveo and Impala by making them sportier and sleeker.

Ford is using wireless features in more and more of their vehicles. They are adding Wi-Fi transmitters into models such as the Edge and Lincoln. Soon, drivers will have internet access in their vehicles.

Well, it really should not come as a total surprise.

China has passed the United States as the worlds # 1 car market. Why should that surprise anyone. China has a billion or two people and the United States ultimately cannot compete with the raw population numbers of China. The key for communist China was and is allowing their people to begin earning enough money to afford cars.

Also helping the Chinese automotive market was a massive government incentive program that pushed sales up 46% in just one year. Can that trend continue? Highly unlikely.

About 10.4 million vehicles were sold in the U.S. in 2009, a drop of 21% from a year earlier. The only month the United States outsold China was August of 2009, when the Cash for Clunkers was in full operation.

Some analysts believe the U.S. will regain the top auto sales market sooner than later once China scales back on its government incentives. Plus, American consumers made an obvious choice in the past year to reduce large purchases with an economy that has yet to fully bounce back.

Report Card for Cars in U.S.

Here they go again.

The U.S. Government, in their drive to push more people into the vehicles they want the public buying, is proposing a requirement that every vehicle sold come with a letter grade.

All electric and hybrid vehicles will receive an “A” grade and every other vehicle a “B” grade or less. The lowest grade given will be a “D”.

This idea reminded me of the first time I saw letter grades on the windows of restaurants in California. Those grades definitely would effect my decision whether to eat at a particular restaurant or not because it was dealing with things like cleanliness.

Will it work in the automotive industry? Only time will tell. Once consumers understand that it is only a grade representing a vehicle’s fuel efficiency and emissions they likely will overlook the grade. Apparently, the new grading system will have nothing to do with the value vs cost of the vehicle, safety issues, warranty offered, or mechanical track record of a particular model.

Of course, small cars will generally receive the highest grades and lower fuel efficient vehicles the lowest grades. Sometimes what the government forgets is the pocketbook of consumers.

If someone can only afford to buy a $14,000 vehicle it’s not likely they will fork over $30,000 for an electric Nissan Leaf. And most wealthy people who can afford to buy a Leaf are more likely to buy a Lexus or other luxury vehicle.

Things change and that includes how you care for your vehicle. Here are some tips for taking care of your vehicle and ideas for saving money too.

Tips for Caring for Your Vehicle

1) Do not use premium fuel unless your owner’s manual specifically requires it. Some manuals “recommend” premium gasoline but it is not necessary.

2) You no longer have to change your oil every 3,000 miles if you own a newer vehicle. Most newer vehicles today are fine having the oil changed every 5,000 or 7,000 miles. Read your owner’s manual.

3) Change your air filter around every 25,000 miles. If you delay this could result in a filter that becomes clogged and could hurt your gas mileage.

4) Have your mechanic check your brake pads. It’s better replacing pads versus your brake drum or rotors.

5) Avoid expensive mileage-boosting additives. There is not a whole lot of evidence they really do much for your vehicle. Advertising for these items increase when gas prices rise.

6) Vehicle need a tune up? Engines for newer vehicles today are tuned by on board computers. Don’t fall for this gimmic.

7) Check engine light on? Don’t ignore it. Your vehicle’s computer is alerting you to a potential problem. Ignoring it could cost you more in the long run.

You may have expected electric vehicles to take hold in the consumer market primarily. But businesses have been an expanding market for electric vehicles. Staples, the office supplier, purchased 41 electric trucks with plans to maybe buy an additonal 40 somewhere down the road.

The electric trucks have a top speed of about 50 miles per hour. But commercial delivery fleets generally drive a specific route and a limited number of miles per day. That fits perfectly into the offerings of most electric vehicles, which have a limited battery range.

The electric trucks cost about $30,000 more than a diesel, but Staples officials predict they will recoup that cost in less than four years through various savings, such as fuel costs, brakes (electric vehicles use regenerative braking), fuel filters, oil, transmission fluid and belts.

Other companies moving into the electric vehicle market includes AT&T, FedEx, PepsiCo, and Frito-Lay.

Virtual Dashboards

While we have read about using “touch” technology on electronics such as phones and laptops, the next wave of touch technology just might be in your automobile.

For example, Volkswagon is launching a redesigned A8 model that will include, as an option, a touch pad that allows you to send commands to the vehicle’s navigation and bluetooth system with the touch of a finger. As you touch the device the car will repeat by voice the letters back to you. By using voice commands a driver would be able to determine a location. Another upgrade being worked on is a camera inside the vehicle that will track the movement of a driver’s head – to determine if a driver may be falling asleep. The camera will notify the driver if it believes that is the case.

In recent years the costs to power such technology has decreased significantly.

However, the big concerns from some circles is the ability for drivers to utilize such technology without becoming even more distracted than they already are. Most of the technology, at the moment, is being directed toward the upper end of the vehicle market.

Volkswagon, for one, will install the technology increasingly throughout all their models as they continue to master the device. Ford and Lincoln models are also launching touch technology.

When Should You Drop Full Coverage?

As your vehicle gets older you may be wondering if the time comes to remove the full coverage and save the money.

When should you remove full coverage? How old should a vehicle be before it is ready for just liability?

Full coverage or Liability?

The best solution is to simply ask your insurance agent to provide a comparison. See how much money you would save by dropping full coverage. There is a chance the premium savings is small enough to warrant keeping full coverage on the vehicle.


A gentleman walked into my office for car insurance. With his current carrier he only had liability insurance on his older truck. Normally I would have recommended liability only but noticed the cost to add full coverage was very reasonable.

The client agreed and we put full coverage on the truck.

Some months later the client called and said the truck had caught fire and was destroyed. He ended up getting money for this truck because we put full coverage on it.

The client revealed to me that he had no money to buy another vehicle and the insurance saved his day.

The moral of the story is to ask your insurance agent to give you a comparison.

The Chevy Volt

A Chevy Volt caught fire while parked at a National Highway Traffic Safety Administration testing center. The fire burned other surrounding vehicles in the parking lot but there were no reports of injuries. Lithium ion batteries, used in electric vehicles, are flammable.

NHTSA put forth a statement that they believe the electric vehicle is no more dangerous than a gas powered vehicle.

While President Obama has set a goal to have 1 million electric vehicles on the roads by 2015 this incident shows there is still much work to be done. GM states that they have invested 300,000 hours testing the vehicle and believe it to be safe. A spokeswoman for the Nissan Leaf said there have been no reported incidents with that vehicle.

President Obama is set on revamping federal transit rules that will steer more monies to other modes of transportation, such as street cars, bus routes and other projects.

The goal is to reduce driving, contain sprawl and create transit-related jobs.

How that will work in the Phoenix metro market is unclear. And there is no report yet whether the Phoenix area is even on the Obama administration’s radar for this type of funding. Certainly light rail has helped people ditch their vehicles in certain circumstances but the valley is fairly spread out.

The average street car costs between $3-4 million dollars. Tucson has seven street cars to purchase on order.

Portland, Oregon received about $70 million in funding last year to expand its existing downtown streetcar program. Along with the added routes and improved service has been an increase in business expansion along the streetcar routes, including retail, housing and offices.

In Tempe, apartment complexes have seen a greater tendency for students to choose housing along the light rail lines. And if a study were conducted business along that route is likely to have increased.

Teenage Drivers

You may be surprised to know this. The number one cause of death and disabling injury for teenager are motor vehicle accidents, according to one news story.

A driver in the 16-19 year old age group is 4 times more likely to have an accident and twice as likely to DIE in an accident than an older adult.

A 16 year old driver is 3x more likely to have an accident than someone age 18-19. Over 1/3 of all deaths in the 16-19 year old age range is from car accidents.

Having teenage drivers on your auto policy is a risky proposition for parents. Not only do they carry risk of hurting themselves but they carry great risk of causing damage, injury or even death to others from their inexperience. This means that, as parents, you could find yourself suffering financially from the actions taken by your teen.

Imagine if they severely injure or kill another person. Your auto insurance carrier will pay up to your policy limits and walk away. There is a great chance you could be sued personally over and above whatever your auto insurance limits cover.

It is very adviseable for parents with teenage drivers to carry an Umbrella Insurance policy. Ask me for details.

Call our office at (480) 659-0229

Beware Craigslist Scams

When my son was 16 years old and dreaming of the day we buy him a car, he knew it would not be anything fancy. It is something he understands from the day his sister was given an older vehicle as her first car.

So we look on Craigslist, which is a great place to start since many people place vehicles for sale virtually every single day. And we have made quite a few calls and sent many emails inquiring about various cars for sale.

Which has led us to the Craigslist scams.

Some of those vehicles for sale are nothing more than scam artists seeking to separate me from my money. One such scammer ran an advertisement on a 2006 Honda Accord. It was very reasonably priced, which was a tip off. However, in this economy it is not uncommon for someone to need out from under a vehicle loan or in need of quick cash.

The Honda Accord scammer emailed back a picture of a female uniformed military person claiming to be serving in the United Kingdom who needed to sell their vehicle, which was sitting in Arizona somewhere. If we only would pay them via Pay Pal or some other method they would send us clear title.

Yeah right.

We have encountered this Craigslist scam several times now. They must work often enough or these losers would not continue to run their bogus ads.

It reminds of those scam emails that used to arrive in my inbox. The person claiming to be from some foreign country trying to close a big business deal and all they needed was an American to act as a third party to complete the deal and receive a piece of the commission.

Just remember, it is sounds too good to be true, it probably is.

Thanks and God bless!
Gary Brown, Agent
(480) 659-0229

Toyota’s Recalled

Toyota announced they are recalling upwards of 700,000 vehicles.

This includes almost half a million Toyota Tacoma’s due to problems relating to steering wheel cable assemblies. Model years affected are between 2005 – 2009.

Toyota halted sales of their top selling model – the Toyota Camry, due to concerns about the gas pedal sticking that could cause it to accelerate.

This comes on the heels of an earlier announcement months ago regarding four million vehicles that were recalled due to issues with gas pedals trapping beneath floor mats and causing sudden acceleration. There were reports that these issues were potentially at the root of several automobile crashes that allegedly included fatalities.

The Camry is not the only model that is being temporarily shut down. Also being investigated are concerns with the Rav4, Corolla, Matrix, Avalon, Highlander, Tundra and Sequoia. The models in question go as far back as 2007. This is a big blow to the normally reliable Toyota brand, which sells as many as 65,000 Camrys and Corollas each month alone. The Toyota Camry carries over 3% of the American car sales market.

If you own one of these models contact your local dealership and inquire into whether you can bring the vehicle in for a free inspection, or call the Toyota Customer Experience Center at (800) 331-4331.

Toyota Extras you Won’t find Elsewhere

Big Two Toyota in Chandler usually offers its waiting clientele amenities like a manicure, back massage, shoe shine or even food. Normally they charge for these extra services.

But if you are one of the unlucky Toyota owners whose vehicle is subject to recall your situation just got a little bit less stressful. Big Two Toyota is offering all these services at no charge to clients inconvenienced by the recall. They also hired additional employees to ensure clients are met immediately upon entering the lot and the influx of phone calls.

Most of the Toyota owners who have been interviewed expressed confidence that the automaker will fix these current brake and/or acceleration issues and re-emerge stronger than ever. To date, there have been an estimated 5 million or more Toyota’s recalled.

Big Two Toyota is located at 1250 South Gilbert Road in Chandler.

Toyota Prius

The Toyota Prius has been an unprecented success.

It is for this and other reasons that Toyota is pushing ahead with plans to release fuel-cell and electric vehicles in the United States over the next couple of years.

2012 will mark the debut of an electric vehicle in the U.S. by Toyota Motors. Then in 2015 the company will begin selling hydrogen fuel-cell vehicles.

Toyota will debut up to eight new hybrid models in the next few years with a sales goal of $1 Million annually world wide. The company expects their hybrids will eventually outsell even the hyper-popular Toyota Camry, currently the best selling passenger car sold in the United States. By 2020 all Toyota models are expected to be of the hybrid variety.

As perhaps the most aggressive alternative vehicle maker thus far, Toyota is pushing forward with electric vehicles, fuel-cell vehicles, plug-in hybrids and vehicles that will use a lithium battery. Their electric vehicle will have a range of about 100 miles.

Toyota increased its U.S. market share in 2009 and even outsold behemoth GM in its own back yard.

The Toyota Prius has been an unprecented success.

It is for this and other reasons that Toyota is pushing ahead with plans to release fuel-cell and electric vehicles in the United States over the next couple of years.

Toyota Electric Vehicles

2012 will mark the debut of an electric vehicle in the U.S. by Toyota Motors. Then in 2015 the company will begin selling hydrogen fuel-cell vehicles.

Toyota will debut up to eight new hybrid models in the next few years with a sales goal of $1 Million annually world wide. The company expects their hybrids will eventually outsell even the hyper-popular Toyota Camry, currently the best selling passenger car sold in the United States. By 2020 all Toyota models are expected to be of the hybrid variety.

As perhaps the most aggressive alternative vehicle maker thus far, Toyota is pushing forward with electric vehicles, fuel-cell vehicles, plug-in hybrids and vehicles that will use a lithium battery. Their electric vehicle will have a range of about 100 miles.

Toyota increased its U.S. market share in 2009 and even outsold behemoth GM in its own back yard.

The Lithium Battery War

As the electric car and hybrid age unfolds before us Toyota Motor struck a major deal to secure lithium from Argentina to help ensure they have future access to the mineral. The deal is valued somewhere around one hundred, twenty million dollars. Lithium is found to be lightweight, heat resistant and an ideal component for rechargeable batteries.

Toyota Tsusho Corp, owned partly by Toyota Motor, bought the stake. Toyota Motor hopes to begin commercial production of the lithium by 2012. The future global market for lithium-ion batteries is anticipated to increase some 90 fold.

The move gives Toyota a certain supply of the resource as they try to avoid battling against other market demands when the competition between other car makers, as well as other lithium-users, increases. in future years.
Japanese electronic makers are already knee-deep in lithium investing for devices such as laptop computers. Countries rich in lithium are Argentina and Chile, among others.

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Toyota Sales Halted

TOYOTA HALTED the sale of 8 models in the U.S. and Canada due to alleged acceleration issues. As the massive Toyota recall marches onward, the effects are being felt far and wide. Up to 4.8 million vehicles may be involved, though Toyota has announced that it has found a potential solution to the “stuck pedal” problem.

ATTORNEYS are lining up to take their shot at suing Toyota over client injuries and fatalities. Even Toyota owners who have never been injured are claiming that the loss in car value damages them. There also is the issue of whether Toyota will reimburse car owners who are without their vehicle and need a rental while repairs are eventually made. One Georgetown professor went so far as to say he believes the Toyota models at issue may never recover their value, as the public will know which models had acceleration problems and may be hesitant to pay full value for a used Toyota that was once subject to a recall.

MEANWHILE FORD has picked up one major score – Consumer Reports, according to the Wall Street Journal, is giving Ford greater scores than Toyota on quality factors – long a Toyota area of domination. If Ford can translate this news aptly to the buying public it could be an incredible coup for the automaker. Ford just reported its second profitable quarter in a row to go along with its first annual profit in four years. The company’s profit was helped by a 26% rise in vehicle sales. Ford gained market share in 2009, while GM and Chrysler are in bankruptcy reorganizations. Work force and other reductions of about $500,000 million less than in 2008 helped Ford’s bottom line. Ford still has debt of about $34 billion to deal with.

HERTZ and other car rental agencies are feeling the pain of the Toyota recall as they and other car rental agencies are removing thousands of Toyota’s from their fleets. About 20% of the Hertz fleet of cars are Toyota’s, believed to be the highest of any of the car rental firms.

There is no recall of lower Arizona Car Insurance rates. Contact us today for a quote by calling (480) 659-0229.

Usage Based Auto Insurance is Coming

Usage Based Auto Insurance – the coming trend you cannot avoid

It is the next big thing on the auto insurance horizon. Usage based insurance means auto insurance carriers can track your driving habits and base (at least in some part) your premium on those habits.

Like to drive late at night or routinely break hard? You may pay more in auto insurance premiums than your neighbor who does not do these things.

Progressive Insurance has an optional program called “Snapshot”. A device is installed (easy to do) into a port underneath your dash. It sends a signal back to Progressive and lets them know your driving habits. This program is not for everyone. However, if you answer some basic eligibility questions and after six months demonstrate that you qualify based on your driving habits, this device can save you up to 30% on your premiums.

The thing with Progressive Insurance – they WILL NOT raise your rates if their Snapshot device shows you do break hard, drive late and, in essence, do not quality for the program. It simply rewards those drivers who DO drive more safely and comply with the program. The device also cannot be used in a claims situation against you, according to Progressive.

The point behind Progressive’s method seems to be – we will dangle lower rates in front of you if you do these 3 or 4 things. What’s to not like about that?

Usage based insurance looks at driving habits & factors, such as whether you apply your breaks harshly, drive late at night, speed and drive higher mileage. Insurance companies will begin pushing for more technology such as this to help them further determine which clients are the best risks and reward them with lower rates.

75% of insurance companies are currently testing or beginning pilot programs for usage based auto insurance. Roughly 20% of insurance carriers are already running usage based programs. 8 of the top 10 insurance companies are using usage based technology or in the testing phase already.

Ohio Raising Minimum Limits – Arizona should as well

The State of Ohio House and Senate have agreed on a bill that would increase the minimum levels of car insurance coverage from $7500 to $25,000 for property damage and $12,500 on bodily injury to $$25,000.

This is the first time Ohio has changed their minimum limits since 1969.

Property Damage – your own policy covers damages to other vehicles (and other property) when you are at fault.

The big challenge has been consumers carrying the lowest property damage limits and then causing damage to other people’s vehicles that are worth far more than the $7500. This puts other drivers who are completely innocent in financial jeopardy because another driver carried too little coverage.

Bodily Injury – your own policy covers damages to injuries you cause when you are at-fault in an accident.

The result of raising the minimum levels of insurance will be a higher cost to consumers who have the minimum limits. The actual cost to policyholders will vary from driver to driver based on their driving record. Typically, those who carry the state minimum limits are those with the worst driving records. Due to a poor driving history their auto insurance rates are inflated and in response they sometimes choose to cut back their coverage and save money. It is a difficult situation for those in this situation. However, protecting the public is the central issue. Opponents will argue that movements such as raising the minimum limits will cause more drivers to drive uninsured.

While we have great sympathy for those paying high auto insurance premiums owning and driving a vehicle means doing the right thing to protect those we may injure or cause damage.

In Arizona property damage minimum is $10,000 and bodily injury is $15,000. And in my opinion these numbers are woefully low as well. It would do our state good to increase these minimums.